🇨🇦 Why Canada Is Falling Behind in the Global LNG Boom – Key Facts, Missed Chances & What’s at Stake

Mati Lio
Aug 6
3 min read

Updated: Aug 7

🌍 Canada’s Missed LNG Opportunity: What’s Next for the Economy?

As global demand for Liquefied Natural Gas (LNG) continues to surge, countries like the U.S. have taken the lead in supplying energy to Europe and Asia. While Canada has long held the potential to become a major LNG exporter, delays in building key pipelines and export terminals have raised questions about missed economic opportunities. Could this have been Canada’s moment to shine on the global energy stage?

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🔹 Canada’s Energy Potential vs. U.S. Momentum

Canada is currently the 5th-largest producer of natural gas globally, but exports primarily to the United States. Meanwhile, the U.S. has scaled up its LNG export capacity dramatically — from zero in 2010 to over 14 billion cubic feet per day (Bcf/day) by 2025 — earning it the title of top LNG exporter by volume.

In this post, I break down the facts, explore what went wrong, and highlight what lies ahead for Canada’s LNG strategy in 2025 and beyond.

🔹 Why Canada Fell Behind

Regulatory hurdles, lengthy approval processes, community opposition, and environmental impact assessment have delayed or cancelled major LNG projects over the past decade.

Notably, Petronas’s $36 billion Pacific NorthWest LNG project was cancelled in 2017 after prolonged delays.

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🔹 What’s Changing Now

LNG Canada, a C$40 billion project in Kitimat, British Columbia, backed by Shell and major Asian partners, is Canada’s first large-scale LNG export terminal, set to begin exports in mid‑2025. It will initially ship up to 14 million tonnes per annum (≈ 1.9 Bcf/day), and once fully operational, may double in capacity.

The country also has two other projects in development: Woodfibre LNG (targeting 2027) and Cedar LNG—an Indigenous-majority FLNG facility expected online by 2028. Together, Canada’s LNG capacity under development is projected to reach 2.5 Bcf/day by 2028, according to the U.S. EIA forecast.

🔹 Canada’s Competitive Edge

A proposed export facility in BC offers:

Shorter shipping routes to Asia compared to U.S. Gulf Coast terminals, reducing transit costs and avoiding Panama Canal choke points

Lower liquefaction costs thanks to cooler ambient temperatures in B.C.

Vast reserves in the Western Canadian Sedimentary Basin, estimated to sustain over 160 years of production at current rates.

🔹 Economic and Strategic Impact

A 2020 Conference Board of Canada study estimated that scaling Canadian LNG exports to 7.4 Bcf/day (~56 Mtpa) could boost GDP by $11 billion/year, create ~100,000 jobs, and generate over $2 billion in annual tax and royalty revenue.

Government efforts—including reforms to expedite major project approvals and partnerships with Indigenous communities—seek to unlock this economic potential.

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🔹 Risks & Limitations to Consider

Operational challenges: LNG Canada has faced turbine and processing issues during ramp-up, limiting output to under 50% capacity initially.

High costs: Projects like Woodfibre LNG have seen construction cost overruns due to remote terrain logistics.

Policy & market uncertainty: Analysts warn that global LNG markets may remain oversupplied, questioning long‑term returns.

Others: Environmental and climate concerns still influence project approvals.

🗺️ Bottom Line

Canada is finally entering the global LNG export market—but later than the U.S.. The country has solid advantages in reserve size and geography, yet must navigate regulatory delay, infrastructure challenges, and market volatility. If its new facilities operate smoothly and demand remains strong, Canada could emerge as a meaningful global exporter over the next decade.

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📌 Disclaimer

This blog post is provided for informational and educational purposes only. It summarizes publicly available data and credible media reports on Canada’s LNG sector. It does not constitute political commentary, investment advice, or endorsement of any project or policy. All content is original and written in a neutral tone to inform a general audience.

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